Married couples often enjoy a more comfortable standard of living because they combine their resources and efforts. Two people paying for household expenses at a single property can often qualify for a larger mortgage and enjoy various comforts that they might not be able to afford independently.
They may acquire a variety of different types of assets, ranging from household furnishings and vehicles to investments. A high-asset marriage has the potential to end in a relatively contentious divorce. Those preparing for high-asset divorces have many issues to address, including financial support and property division.
Financial success can motivate people to be more proactive about protecting themselves. Spouses may have negotiated and signed prenuptial or postnuptial agreements. What impact can those marital contracts potentially have on divorce proceedings?
Marital contracts facilitate uncontested divorces
Prenuptial and postnuptial agreements generally contain basic terms about marital property and what should happen during a divorce. Frequently, spouses designate certain assets as separate property, meaning they are not subject to division if they divorce. They may outline specific standards for property division that may deviate from the rules applied in a litigated or contested divorce. They may even reach an agreement about alimony or spousal support.
Most of the time, those pre-existing terms allow for a relatively straightforward and amicable divorce. The spouses use the terms included in their prenuptial or postnuptial agreement to set the terms for an uncontested divorce filing. They can then relatively quickly terminate the marital relationship without leaving major decisions to the discretion of a judge.
Prenuptial and post-nuptial agreements can lead to a faster divorce process, which may ultimately translate to a lower-cost divorce. They also help people in high-asset divorces protect their privacy by eliminating the need to make formal disclosures about financial matters.
Marital contracts can lead to conflict
Occasionally, one spouse may dispute the validity of the prenuptial or postnuptial agreement. They might claim that they signed under duress or did not understand the terms of the agreement. They might insist that the contract is imbalanced and therefore unconscionable. In those circumstances, litigation regarding the validity of the contract is possible. Conflicts related to prenuptial and postnuptial agreements may make divorce more contentious.
Understanding how prenuptial and postnuptial agreements influence high-asset divorce proceedings can help people know what to expect. For most people, marital contracts lead to a faster and more predictable divorce process.